Listening to audio on the Flemingsberg district overpass in Stockholm, January 10. Image – Getty iStockphoto: Alexander Farnsworth
By Porter Anderson, Editor-in-Chief | @Porter_Anderson
‘A Weekly Positive Net Addition of Subscribers’
In its year-end and fourth-quarter report released today to news media for 2023, the Stockholm-based Storytel, lists several top-line indicators of success today (February 15).
The overall upbeat tone of the report’s traditional introductory message from CEO Johannes Larcher reflects the ongoing industry enthusiasm that has been associated for more than a decade now with the audiobook format in publishing and its related products such as podcasts.
Earlier this week, for example, we had the news that Bologna Book Plus and Norway’s Beat Technology are fielding a new afternoon program on audio at Bologna Children’s Book Fair (April 8 to 11).
This was announced as News Corp and HarperCollins indicated that the publisher’s digital sales had increased year-over-year by some 15 percent, largely credited to downloadable audiobooks and a beneficial role played by Spotify’s new offer of audiobooks.
Bookwire, the German-based digital distributor and platform content support company, has another of its French-market “All About Audio” programs coming on March 7. (Registration for that online event is here.) And the Audio Publishers Association in the States on March 4 moves its annual Audie Awards ceremony to Los Angeles from New York City, reflecting the growing presence of celebrity readers and their popularity among 27 categories of shortlisted performances.
Economic reports such as the most recent AAP StatShot look at the United States’ November market continue to chart double-digit growth in audiobooks, while Dosdoce’s Javier Celaya on January 25 reported a remarkable surge of 75 percent for the audio industry in Spanish-language markets in 2023 over 2022. (We have news coming of a special event in Spanish-language audio, in fact, from Luis González Germán Sánchez Ruipérez Foundation, watch for that in coming days.)
And in the United Kingdom this month, the AudioUK trade association has set out a manifesto of development for its sector by comparison to sister creative industries in the British market.
In terms of Storytel’s 2023 end-of-year performance, the Swedish company’s “streaming business both in the Nordics and in non-Nordics continues to advance” in 2023 figures, Larcher tells shareholders, “compared to the fourth quarter 2022. In the Nordics, a 15-percent growth in revenues was mostly driven by expanding average revenue per user while the average paying subscribers’ count grew 5 percent to 1.2 million. A non-Nordic streaming revenue growth of 17 percent was mostly driven by a 1-percent increase in the subscriber base, which surpassed 1 million consumers for the first time.
“Progress,” Larcher writes in his summary, “was particularly evident in the four growth markets─the Netherlands, Poland, Bulgaria, and Turkey─with a 25-percent increase in average paying subscribers.”
After work on marketing operations, Larcher reports, “Since the spring of 2023 we have achieved a weekly positive net addition of subscribers in 39 out of 40 weeks, despite subscriber losses in non-core markets, supporting an 8-percent increase in paying subscribers to 2.2 million.”
‘A Challenging Macroeconomic Environment’
All of this, Larcher characterizes as “improved profitability and cash flow as compared to the fourth quarter 2022.
Johannes Larcher
“Group revenue for the quarter grew 9 percent with strong support from streaming revenues, which increased 16 percent. The solid revenue grown,” he says, “means we surpassed our updated guidance for 2023.”
However upbeat, the “transformation” that Larcher refers to doesn’t come without pain. Starting in January, Storytel opened an “efficiency initiative,” he writes, which will result in “a reduction of the workforce by approximately 80 team members, or 13 percent,” by comparison to 2023 workforce levels.
And Larcher indicates a target in 2024 of revenue growth coming to some 10 percent “with an adjusted EBITDA margin of above 12 percent and operational cash flow above 7 percent of revenue.”
He also outlooks targets for 2026 to reach revenues of some 4.5 billion Swedish kroner (US$430 million) and an operational cash flow above 10 percent of revenue.
Overall, Larcher writes, “Despite a challenging macroeconomic environment in several of our core markets [he refers to inflation and rising interest rates during 2023], we delivered a strong performance and are doing substantially better financially than a year ago.”
In terms of languages, the company says it now offers audiobook and ebook titles in English, German, Russian, Dutch, Polish, Spanish, Korean, Italian, Arabic, Thai, Hindi, Turkish, Marathi, French, Tamil, Bulgarian, Portuguese, Hebrew, Bengali, Chinese, Indonesian, Malayalam, Serbo-Croatian, Catalan, and Romanian.
It refers now to “more than 25 markets”—we count 29—in terms of how many have its services, marketed as Storytel, Mofibo (an acquisition), and Audiobooks.com (a more recent acquisition). Markets in the list include Sweden, Norway, Denmark, Finland, the Netherlands, Belgium, Poland, the United States, South Korea, Germany, Spain, Iceland, Israel, UAE, Saudi Arabia, Egypt, Italy, Turkey, Brazil, Mexico, Colombia, Bulgaria, India, Singapore, Australia, France, United Kindo, Indonesia, and Thailand.
Larcher, in short, is undeterred by the rise of international competitive interests around him in the audio sphere. “I’m confident that Storytel with its proven business model and solid market positioning,” he writes, “will continue to play a leading role and deliver on our ambitious targets.”
More from Publishing Perspectives on Storytel is here, more on digital publishing is here, more on audiobooks is here, and more on industry statistics is here.
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